Has Alice put your patent portfolio at risk?

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On June 19, 2014 the US Supreme Court issued a landmark decision in Alice Corporation Pty Ltd v CLS Bank International (Alice), affirming the underlying Federal Circuit’s opinion finding all claims of the patent in suit invalid.

The basis for this decision? All of the patent claims are drawn to patent-ineligible subject matter under 35 USC §101, namely, that they are drawn to an abstract idea of intermediated settlement, merely requiring generic implementation of a computer.

Alice’s patent is directed to the use of a third party to mitigate settlement risk, an economic practice long utilised in commerce. The court found that the patent in suit’s method claims fail to bridge the gap between an abstract idea and an invention which is patent-eligible.

Patent attorneys are considering and deliberating on the effect this landmark decision will have upon several aspects of their practice, as well as the effect it may have upon the patent portfolios of their clients. There is no question that many presumptively valid patents when issued by the US Patent and Trademark Office (USPTO) are actually, after the Alice decision, invalid and of no value. The manner in which attorneys draft and craft patent claims is affected by Alice.